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Canada may have to raise its federal carbon tax if it wants to achieve its pledge under the Paris Agreement to reduce greenhouse gas emissions, Canada’s Parliamentary Budget Officer (PBO), the federal budget watchdog, said in a report on Thursday.
Under the Paris Agreement, Canada has pledged to reduce its emissions by 30 percent below 2005 levels by 2030, to a level of 513 megatons (Mt) of CO2 equivalent.
However, under current policies, Canada will have reduced its emissions from 704 Mt in 2016 to 592 Mt in 2030. This leaves a gap of 79 Mt to the 513 Mt target under the Paris Agreement under current policies and measures, PBO said in its report.
So the office estimates that an additional carbon price rising from US$4.51 (C$6) per ton in 2023 to US$39 (C$52) per ton in 2030 would be required to achieve Canada’s emissions target under the Paris Agreement, on top of the US$37.58 (C$50) per ton federal fuel charge that is scheduled to be in place in 2022.
The Paris Agreement goals and the effects of climate change have become a hot topic in all developed economies in recent years.
Last month, the Bank of Canada ranked for the first time climate change as a key weak spot in the Canadian financial system and economy, as a growing number of governments start to warn of the risks to the planet and economy that global warming brings.
While the budget office of Canada has calculated that the federal carbon tax may have to increase for meeting the Paris Agreement goals, nearly half of Canadians are opposed to the carbon tax, according to a poll by Forum Research earlier this month. Most of the respondents—two thirds— in a poll among 1,633 Canadian voters said that the carbon tax will affect their vote in the federal election in October, with Conservative voters opposing the tax more likely to be motivated to vote.
Related: Climate Change Could Trigger Global Financial Crisis
“The carbon tax looks like it’s mobilizing its opponents to vote in far greater numbers than its proponents,” said Dr. Lorne Bozinoff, President of Forum Research. “Additionally, Conservative supporters are far more opposed than Liberals are in favour. If the Conservatives can consolidate the opposition around this issue, and make it the focal point of the campaign, the Liberals’ re-election prospects may be severely diminished,” Bozinoff said.
Meanwhile, the oil producing province of Alberta passed earlier this month legislation to repeal the provincial consumer carbon tax—a key campaign pledge of new Alberta Premier Jason Kenney.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.